24 Luxury contracts were signed last week for property $4mm and above in Manhattan. Discounts drove the action as the average discount from the listing price is over 10%. It’s not unusual that property owners who purchased in the last 3 years are selling at a loss in order to liquidate.
In other reports, rents are still trending down with concessions like free month’s rent and owner paid broker fees fueling activity especially in new developments where 90% of the apartments were rented with concessions. Just under half (44%) of the new leases signed in Manhattan in April included concessions.
The Author- Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.
A new building is rising at 61 West 104th street. The previous building was a 10 unit building which was demolished. The new building will have 7 stories, 34 apartments and just over 23k of residential square footage.
Previous building housed 10 units while the new building will house 34 units.
Here is a look at the closing costs for buyers and sellers of Manhattan real estate.
For the Seller:
Coops,Condos,residential 1-4 family
Brokerage Commission negotiable typically 6%
NYC Transfer tax:
1% of price for purchases up to $500,000
1.425% of price for purchases over $500,000
NYS Transfer tax
$2 per $500.00 of sales price
Attorney fee $1500 and up
Flip tax (depends on building) 0-5% COOPS*** Continue reading Manhattan closing costs for buyers and sellers→
Many townhouse buyers like the idea of buying a Manhattan fixer upper but underestimate both the cost, time and effort involved with a renovation. If you purchase a fixer upper, the positives are that you can make the home exactly as you want from unit number, to finishes to outdoor space like a roof terrace or penthouse. But you will pay for that convenience in renovation costs which could be as low as $150 per square foot to as much as $700 or more per square for a high end renovation.
Additionally, a renovation will require approvals from Department of Buildings, as well as Landmarks Preservation Commission (LPC) if the building is one of the coveted Manhattan historic districts. Also there is no guarantee that if you purchase a $7 million Upper West side townhouse and add $4 million that your space is worth more than $11mm total.
I think the questions you should ask are:
1- Can you find something in a higher price range that is already finished close to what I am looking for in a townhouse?
2- Do you have all of the necessary capital to pay for the renovation including architecture fees, permits and expediters? Also, do you have the time to dedicate to supervising the work and making sure your expectations are met?
3- Do you have the patience to wait between 1-3 years or more for the townhouse to be finished while undergoing renovation?
4- Do you have enough capital to cover the cost overruns or increased costs associated with the unanticipated items?
5- Are you okay with the potential increase in real estate taxes due to the renovation and potential alteration? Speak to your real estate tax attorney for more details on that.
A townhouse renovation is not for the faint of heart and should be entered into with care and tons of research. Perhaps it might be wise instead, to purchase a Manhattan townhouse that is already renovated and ready for occupancy.
The dining area at 189 Edgecombe, a gut renovated townhouse in Hamilton Heights that is for sale for $2.525 million.The marble clad kitchen with island, dishwasher, garbage disposal, wine refrigerator and sliding doors to the deck. 189 Edgecombe avenue
The Author- Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.
According to the latest market reports, the average listing price is down about 10% compared to last year, but 25 contracts over $4 million were signed last week. $849 million dollars of contracts have been signed in the $4million and up segment since the last week of March which is the best start of the Spring market since 2015. What do these seemingly differing numbers mean? The luxury/new development market has been in a buyer’s market for about 2 years now. As a result, the buyer and seller expectations are more inline with each other than lower price points. For the last year or so, new developments have been open to negotiations. Additionally, some projects have been paused or never got off the ground. So the existing inventory is being sold.
This is unlike the below $4 million price market where sellers’ expectations needs to adjust to the current reality and that they will not achieve the same prices that were reached a year ago. Manhattan buyer’s market tend not to last very long.
The Author- Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.
According to a recent report, the Manhattan vacancy rate is decreasing even as approximately half of the apartments rented were rented with some sort of concession like free month’s rent. As inventory has increased in the last few years, landlords have adjusted their expectations and as a result the vacancy rate has decreased even in one of the slowest months of the year for Manhattan rentals.
The Author- Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.
As days on the market increases for most residential real estate, the consensus is that the Manhattan residential market is in buyer’s market. New realities are setting in for sellers and not just in the luxury market but in all price ranges including starter homes. In 19 years of selling residential real estate, I have seen this cycle a few times already. The last time through, the market forces were accelerated by the financial crisis. This time around perhaps the winds behind the sails may be the tech bubble as well as the Tax Reforms and Jobs Act and rising interest rates.
But in any case, a buyer’s market tends to not last too long so while some buyers are waiting it out and deciding to rent instead, now maybe the time to make that purchase, knowing that finding the absolute perfect time to buy may be like trying to catch the bottom of the stock market. One thing is for sure is that with a little patience and good negotiation, a purchase now can lead to serious appreciation once the buyer’s market turns again into a seller’s market.
Also I think understanding that the Manhattan property values are not decreasing across all asset classes. Townhouses in Harlem continue to see steady sales and modest appreciation. Also, try finding a 6-12 family property for sale uptown with upside potential. There is very little for sale. In these markets both investors and end users are pouring in and there is a lack of inventory. Recently, I had a 8 family for sale at 313 W 138th street and there was a high level of interest and the property went to contract at over asking price within 1 month of listing.
The Author- Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.
In an ideal setting, a Manhattan townhouse will be delivered vacant and sold to a buyer who can convert it to a single family mansion, condos or a rental building. However, when a Manhattan building is conveyed with a rent stabilized tenant or a few rent stabilized tenants, then the buyer pool will narrow but it still has tremendous value. The factors that impact the value will be size of the apartment, likelihood of accepting a buyout, and what percentage of square footage, the RS tenants occupy within the building. The calculation of value is going to be based on the net operating income.(NOI). The NOI and cap rate will dictate the value, but the upside which the buyer/investor will evaluate will have to do the likelihood that the tenant might be bought out now or in the near future, the age of the tenant, and how likely they might have immediate family who will succeed them within the apartment.
For example, on a recent tour of Upper west side townhouses with an investor we looked a one building that was asking $5.4 million with 6 units 2 of which were rent stabilized. Within the same neighborhood, a 7 unit building was asking nearly $1 million more with all free market tenants. Both were both offered at an approximate 3% cap rate.
Now what happens when the majority or all of the building is occupied by rent stabilized tenants and the cap rate is extremely low or the income is not even covering the expenses, now you will see an even more narrow pool of buyers whose expectations for a discount go up as the rents paid by the tenants goes down as does the likelihood of a buyout. In this situation, a more thorough analysis based on current market conditions will need to be done by a Manhattan real estate broker experienced in the transfer of townhouses and multifamily properties.
The Author- Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.
If you are thinking of selling your Manhattan townhouse one of the first things you should verify is your certificate of occupancy. A certificate of occupancy tells a prospective buyer what the legal use is. The challenge is that the certificate of occupancy rules came about in 1938 and many homes were built before that. As a result, you may have a building without a certificate of occupancy. Department of Buildings site Go to the DOB site and enter the address of the property then click on certificate of occupancy link. Many properties will not have a certificate of occupancy on file. In some cases the CofO may contradict the actual use. Consult with your lawyer and architect and your real estate broker to see what would be required to modify the CofO and if it can be sold without bringing the C of O inline with the actual use.
If there isn’t a CofO on file then it may get even more complicated. Consult with your attorney/architect to see what the DOB records indicate. Sometimes, it can be confusing due to different NYC agencies classifying your Harlem townhouse as different usages. Recently, I met a homeowner who said his building was “registered” as a 4 family with the City. Upon initial research he was being taxed as a 4 family by the NYC Department of Finance but his CofO says 3 family home. If your CofO says 3 family, you have a 3 family.
As always, this blog is intended for informational purposes and not as a substitute for legal advice so please consult your attorney. Your real estate broker can normally recommend an attorney for you who specializes in real estate and hopefully can shed some light on any CofO issues that you might have. Additionally, an experienced, Manhattan townhouse broker can advise you on what is customary as far as paper work and what would cost you money in terms of marketability.
The Author- Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.
News about the NYC real estate residential and commercial markets provided and interpreted by an industry veteran licensed since 1999. Brian Silvestry of BSRG Inc. Licensed real estate broker
Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.
